A business model outlines how a company creates, delivers, and captures value. It describes the products or services offered, the target market, and the revenue streams. Common types of business models include subscription, freemium, and e-commerce, each with unique strategies for generating income. Understanding a business model is crucial for entrepreneurs and investors, as it helps assess the viability and sustainability of a business. A well-defined business model can lead to competitive advantages and long-term success, while a poorly defined one may result in challenges and financial losses.